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L&G goes for the base rate

The exclusive self-certification tracker mortgage from Legal & General’s Mortgage Club is set at 0.5 per cent above the Bank of England base rate for the first three years of the loan.

This gives it a payable rate of 4.5 per cent. After the first three years it will switch to 1.75 per cent above the base rate for the remaining term of the loan. The mortgage is available for loans of up to 75 per cent of the value of the property.

Legal & General has made the mortgage available to self-employed and employed borrowers. Self-employed applicants will have to sign a declaration of their ability to pay, but will not have to prove how much they earn.

If the mortgage is redeemed in the first two years there is a redemption penalty of 5 per cent of the advance. In the third year this reduces to 4 per cent, with no other redemption penalties after this.

This mortgage has the lowest rate for a three-year base rate tracker self-certification mortgage. According to Moneyfacts the nearest rival mortgage is from Bank of Scotland Mortgages Direct. This is set at 1 per cent above the base rate for three years, giving it a payable rate of 5 per cent for loans of up to 85 per cent.

The Bank of Scotland mortgage comes with free accident, sickness and unemployment insurance for the first six months of the loan and also offers free basic legal fees for remortgages.

The Bank of Scotland mortgage also has a simple redemption penalty. This is an administration fee of £150, which is lower than the Legal & General mortgage.

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